June 2012

Representative John Sullivan (R-OK) lost a Republican primary last night to Jim Bridenstine, who is likely to win Sullivan’s seat in November. Sullivan was the main sponsor of the T. Boone Pickens NAT-GAS Act, which would have funneled money into subsidies for building out infrastructure for natural gas vehicles, specifically fueling stations throughout the country and providing tax credits for large truck fleets that converted to natural gas. While the past few years have seen significant anti-incumbent sentiments, one notable difference between Sullivan and Bridenstine was their stance on subsidizing natural gas:

On only one issue, energy policy, did Sullivan and Bridenstine substantially disagree. Sullivan touted his bill to promote natural gas vehicle fuels, while Bridenstine supports an alternative proposal.

“Let’s get cars, trucks and buses running on natural gas,” Sullivan said. “We have an abundance of it here in the United States. It’s cheap and abundant and … it also addresses a national security issue by lessening our dependence on foreign oil.”

Bridenstine calls Sullivan’s NatGas Act a “big-government” boondoggle because it creates a short-term subsidy to convert vehicles to natural gas.

“We ought not let Washington, D.C., control free markets with tax subsidies,” he said.

Bridenstine said he supports the Domestic Jobs, Domestic Energy, and Deficit Reduction Act, which is backed by Oklahoma’s U.S. Sens. Jim Inhofe and Tom Coburn. That measure is intended to more directly stimulate oil and gas exploration in the United States.

Neither bill, as it turns out, is expected to win approval in Congress.

Now, this was only one “town-hall” type meeting, but perhaps voters in Oklahoma are tired of crony capitalism. It will certainly make the legislation harder to pass, as Sullivan was the primary sponsor, and was on the Energy & Commerce committee.

Obama is the “Outsourcer-in-Chief,” I explain at this link.  He has moved thousands of American jobs to foreign countries, through subsidies and regulations.  A classic example of how Obama used taxpayer money to outsource American jobs is through the green-jobs subsidies in the $800 billion stimulus package, which went overwhelmingly to foreign firms, as American University’s Investigative Reporting Workshop and others have noted.

The Senate this week has an opportunity to check one of EPA’s worst regulations: the Mercury and Air Toxics Standards Rule, also known as the Utility MACT. On Wednesday, the upper chamber of Congress will vote on S. J. Res. 37, a Congressional Review Act resolution of disapproval that would effectively block the Utility MACT.

To read more about the merits of S. J. Res. 37, click here and here. Suffice it to say for this post, EPA’s Utility MACT would cost $10 billion annually, making it one of the most expensive regulations ever. It would also ban the construction of new coal-fired power plants. As against these compliance costs, the Utility MACT’s purpose is to protect a supposed population of subsistence fisherwomen, who consume 225 of pounds of self-caught fish, from exclusively the 90^th percentile most polluted bodies of water, during their pregnancies. I sincerely doubt that these women exist. My doubts are exacerbated by EPA’s failure to identify a single member of this putative population. Instead, they are modeled to exist.

For Members of the Senate—but especially among Members of the Minority Party—a “yes” on S. J. Res. 37 should be a no-brainer. After all, the Utility MACT is all pain and no gain. Inexplicably, however, Sen. Lamar Alexander (R-Tenn.) has steadfastly opposed the bill. I say “inexplicably” because Sen. Alexander’s rationale for opposing S. J. Res. 37 makes no sense.

According to Sen. Alexander, the Utility MACT would help Tennessee by reducing upwind air pollution that crosses into the Volunteer State, thereby making more difficult compliance with federal air quality regulations. In a speech last week, Alexander explained his thinking:

“I believe the EPA is right…and the reason is that it will stop dirty air from blowing into Tennessee because they are gong to require utilities from other states to put on the same pollution control equipment that TVA is putting on and we are going to pay for. So if we are going to do it, then they should do it because they are the source of a lot of our air pollution.”

Simply put, this is nonsensical. For starters, Tennessee’s air shed is already protected from upwind pollution by the “Good Neighbor” provision of the Clean Air Act. As its name would suggest, this provision requires that upwind States mitigate any pollution that adversely affects air quality in downwind States. Pursuant to the Good Neighbor provision, EPA last summer promulgated the Cross-State Air Pollution Rule, the purpose of which is to “stop dirty air from blowing into Tennessee” (to borrow Sen. Alexander’s terminology). Given that both the statute and code of federal regulations already protect Tennessee from upwind pollution, Sen. Alexander’s justification for supporting the Utility MACT is basically a call for duplicative regulation.

Sen. Alexander’s anti-S. J. Res. 37 reasoning is rendered even sillier by the fact that Tennessee is not currently victimized by out of state air pollution. If you follow this link to EPA’s website on the Cross-State Air Pollution Rule, there’s an interactive map that demonstrates all the “linkages” between upwind pollution and downwind areas whose ambient air quality is in violation of Clean Air Act standards. If you slide your mouse over Tennessee, it becomes evident that there are no upwind-downwind linkages adversely affecting Tennessee. Rather, the arrows are all pointing outside of the State, meaning that it is Tennessee about which neighboring States should worry.

In light of the fact that Sen. Alexander’s avowed justification for opposing S. J. Res. 37 is wrong, I remain perplexed as to why he seems to be doing everything in his power to protect the Utility MACT.

Senator James M. Inhofe (R-Okla.) announced this week that he will bring his resolution to block the Utility MACT Rule to the Senate floor for a vote on Wednesday, 20th June. Senate Joint Resolution 37 is a privileged motion under the Congressional Review Act, which means that it requires only a majority of those voting to pass.

The Environmental Protection Agency’s Utility MACT (for Maximum Achievable Control Technology) Rule requires steep reductions in mercury emissions from coal-fired power plants. A new study by my CEI colleagues Marlo Lewis, William Yeatman, and David Bier shows that the rule will have miniscule health benefits and enormous costs. Electric utilities will be forced to close many coal-fired plants, which will raise electric rates for consumers and manufacturers and threaten electric reliability in major areas of the country. Op-eds by Lewis and Bier summarize key findings of their study.

Senators Lamar Alexander (R-Tenn.) and Mark Pryor (D-Ark.) have announced that they plan to introduce a bill to extend the time utilities have to comply with the rule from four years to six years. Their bill has no chance of passing because sixty votes would be required. It is meant to provide cover for several Democrats engaged in tight re-election races. They can vote against the resolution of disapproval (which could pass with fifty votes), but then explain to voters that they support another measure to make the rule less onerous.

Alexander and Pryor’s mischief means that Inhofe’s resolution is likely to be defeated. Note that Alexander, a Republican, is helping Democrats get re-elected.

Here at the Competitive Enterprise Institute, we have been busy trying to inform Members of the Senate about S. J. Res. 37, legislation that would block EPA’s outrageous new Mercury and Air Toxics Standards Rule, also known as the Utility MACT.

EPA’s Utility MACT, simply put, is an affront to common sense. Industry and EPA agree that it would cost electricity ratepayers almost $10 billion per year, making it one of the most expensive regulations ever. Worse, it would effectively ban the construction of new coal-fired power plants, by establishing mercury emissions limits that are a third of detectable levels. Because pollution control equipment vendors cannot even measure the emissions limit required by the Utility MACT, they cannot offer a guarantee that new coal-fired power plants will be in compliance with the regulation. And without such a guarantee, utilities are unable to raise capital to build new coal-fired electricity generating units.

And for what? The regulatory purpose of the Utility MACT is to protect a supposed population of subsistence fisherwomen, who eat 225 pounds of self- or family-caught fish, from exclusively the 90th percentile most polluted fresh, inland water bodies, during their pregnancies. Notably, EPA has never identified a single member of this putative population; rather, they are modeled to exist.

To be sure, politics, not science, is the impetus for the Utility MACT. Environmental special interests form one of President Obama’s core constituencies. They have made no secret of their desire to close every single coal-fired power plant in America. The Sierra Club, for example, runs a “Beyond Coal” campaign that boasts of shutting down almost 43,000 megawatts of coal-fired electricity generation. While campaigning for the Oval Office, then-Senator Barack Obama openly identified with the anti-coal sentiment of his green base. In 2008, he infamously told the San Francisco Chronicle editorial board that he would, as President, “bankrupt” the coal-industry. Now, his EPA is fulfilling this promise.

In order to rein in EPA’s anti-coal agenda, Senator James Inhofe introduced S. J. Res. 37, legislation that would block the Utility MACT. The vote is expected by next Wednesday at the latest, and it could happen as soon as this week.

Yesterday, CEI published a study intended to inform the Senate debate on S. J. Res. 37, titled “All Pain and No Gain: The Illusory Benefits of the EPA’s Utility MACT.” It was authored by my CEI colleagues Marlo Lewis and Dave Bier, and also me.

Last evening, Forbes published an oped about the new study by Marlo Lewis. In the following excerpt, he explains the absurd cost-benefit ratios of the Utility MACT:

The EPA estimates that implementing the Utility MACT Rule will cost $9.6 billion in 2016. The agency also estimates that the required mercury reductions will provide $0.5 to $6 million in health benefits in the same year…For the HAP reductions that are the Rule’s statutory purpose, estimated costs exceed estimated benefits by 1,600 to one or even 19,200 to one.

In this morning’s Washington Examiner David Bier has a piece exposing EPA’s fraudulent economic analysis of the Utility MACT. The following passage aptly summarizes his point:

EPA’s conclusion that the Utility MACT will create coal jobs is based on a single paper by Resources for the Future’s Richard Morgenstern, which studied four industries in the 1980s — pulp and paper, plastics, steel and petroleum — and concluded that for every million dollars they spent on environmental compliance, 1.55 jobs were created in those industries.

Agency officials simply took this finding and plugged in the Utility MACT’s regulatory costs. If this sounds simplistic, they actually show their work in a footnote of their RIA — 1.55 jobs times $10.9 billion adjusted for inflation.

Using this formula, EPA can impose infinite costs on any industry and always claim that it will create jobs. Even if a rule costs trillions of dollars, EPA could still claim job growth!

How does EPA get away with this? With a little help from friendly environmental special interests, that’s how. Here’s how it works: Whenever lawmakers deliberate on a measure that would rein in EPA (be it a vote on EPA’s climate power grab; or its Clean Water Act power grab; or its Regional Haze power grab, or any of its power grabs), well-funded green groups like the Sierra Club, NRDC, or the League of Conservation Voters, immediately take to the airwaves to equate a vote against EPA with child abuse. This is a topic I’ve discussed before on this blog—see here, here, and here. Of course, these ads are nothing but lies. However, they are effective lies. No politician worth his or her salt wants to be accused of harming children. Thus, these green special interests have distorted the debate on environmental policy, such that common sense rarely prevails. As a result, EPA is free to implement the President’s political goals.